Hearing on The global financial crisis and industrial changes in the main European manufacturing and

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Hearing on The global financial crisis and
industrial changes in the main European
manufacturing and services sectors
The European Food and Drink industry

• Rodolphe de Looz-Corswarem
• Secretary General, The Brewers of Europe
• CCMI meeting, 6th February 2009
• European Economic and Social Committee

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The Brewers of Europe

• Founded in 1958
• It is the voice of the European brewing sector
• 27 national brewing associations in Europe
• Over 95 of the beer brewed in Europe
• Our mission
• Secure brewers right to responsibly
• brew and market beer
• Beer - part of European food heritage and economy

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The European Brewing Sector

• Over 3000 breweries active
• 440 million hectolitres beer brewed in 2007
• 25 of the worlds beer production
• The 4 world leaders are European producers
• Over 2.5 million jobs generated directly and
  indirectly
• Revenue from all taxes ? 39 billion per year
• 57,5 billion value added to the European
  economy each year
• Source Ernst Young The Contribution made
  by Beer to the European Economy 2006
• Barth/.Haas Report 2007/2008

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At a glance in 2007
The European Food and Drink industry
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International Food Drinks exports shares
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Major trends on food retail markets

• Decrease of food in household expenditure
• Changes in purchase and consumption patterns
• Market share of 5 TOP retailers are above 50 in
  12 MS and above 70 in 5 MS
• Increasing share of private labels and market
  share of discounters
• Market shares of discouters increase
• Pressure on prices to consumers
• Limited negotiating power of most manufacturers

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Price trends in agricultural markets
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Cereal, Bread and Oil Price Indices
2005 - 2008
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Key Crisis Challenges

• Agricultural raw materials high price volatility
• Long term up-wards trends of agricultural raw
  material prices
• Energy becoming key factor for competitiveness
• Increased difficulty of access to finance /
  credits
• Reticence for providing Risk coverage / insurance
  by banks
• Inmediate payment demands
• Slowing down of exports
• Challenge to whole supply chain (logistics,
  packaging, IT, etc) as all businesses suffer from
  crisis

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World beer consumption 2002 - 2008
Source Canadean Global Beer Trends 2008
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Recent trends in the brewing sector

• Consolidation of the sector
• Top 10 world brewers 2003 53 world market
  share
• 2008 64 world market share
• Investments in logistics, production, variety and
  quality
• Production efficiency increase (less water and
  energy)
• Growing presence of micro-breweries
• Reductions in direct employment
• Sales decrease in 4th quarter 2008 arriving to
  -8
• Impact on restaurants, bars, cafés and events

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Brewing sector - Public authorities attitude

• Increase of beer taxation
• e.g. France, Finland, Latvia, Netherlands,
  Poland, Ukraine, UK
• Research for revenues by other fiscal measures
  affecting
• the food and drinks, and the brewing sector
• Calls for restrictions in advertising and
  sponsoring
• Unequal response to brewers CSR initiatives in
  Europe

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The brewing sector and the single market

• Internal market benefits due to, among others
• - Transport and tourism facilities
• - Better coordination in administrative
  procedures
• - Common regulations for food products
• - Easier access to raw materials and consumers
• Some challenges
• Diverging labelling provisions across Europe
• Call for restrictions in availability and
  cross-border shopping
• Different measures for deposit systems and
  packaging

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Thank you